(UNAUDITED BUT REVIEWED)
D.T.C. INDUSTRIES PUBLIC COMPANY LIMITED 
AND ITS SUBSIDIARY COMPANIES
NOTES TO INTERIM FINANCIAL STATEMENTS
1.	GENERAL INFORMATION
	1.1	Basis for the preparation of interim financial statements
		These interim financial statements are prepared in accordance with Accounting Standards Pronouncement No. 41 "Interim financial statements", with the Company choosing to present condensed interim financial statements.  However, additional line items are presented in the balance sheet, and the statements of earnings, changes in shareholders' equity, and cash flows as in the annual financial statements.
		The interim financial statements are intended to provide information additional to that included in the latest annual financial statements.  Accordingly, they focus on new activities, events and circumstances so as not to duplicate information previously reported.  These interim financial statements should therefore be read in conjunction with the latest annual financial statements.
	1.2	Basis of consolidation
		These consolidated financial statements include the financials statements of D.T.C. Industries Public Company Limited and its subsidiaries, The Direct Trading Corporation Limited and Summer Sun Company Limited and have been prepared on the same basis as that applied for the consolidated financial statements for the year ended 31 December 2002.  There have been no changes in the composition of the Group during the current period.
	1.3	Summary of significant accounting policies
		The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2002.

(UNAUDITED BUT REVIEWED)
2.	ACCOUNTS AND NOTES RECEIVABLE - TRADE
	The outstanding balances of accounts and notes receivable as at 31 March 2003 and 31 December 2002 categorized by their aging were as follows :-
(Unit : Thousand Baht)

Consolidated
The Company Only

31 March
31 December
31 March
31 December

2003
2002
2003
2002
Related parties




Not yet due
-
-
9,676
19,093
Overdue 




     -  Not more than 90 days
-
-
59,958
64,646
     -  More than 90 days
12,854
12,854
11,111
9,272
Total
12,854
12,854
80,745
93,011
Less : Allowance for doubtful accounts
(12,854)
(12,854)
(5,655)
(5,655)
Net
-
-
75,090
87,356
Others




Not yet due
27,308
37,906
7,495
5,867
Overdue 




     -  Not more than 90 days
25,098
25,696
3,989
3,950
     -  More than 90 days
9,636
10,488
1,345
1,212
Total
62,042
74,090
12,829
11,029
Less : Allowance for doubtful accounts
(4,516)
(4,516)
(1,163)
(1,163)
Net
57,526
69,574
11,666
9,866





Net accounts and notes receivable - trade
57,526
69,574
86,756
97,222
	

(UNAUDITED BUT REVIEWED)
3.	RELATED PARTY TRANSACTIONS
	During the periods, the Company had significant business transactions with its subsidiaries and related companies (related by the way of common shareholders and/or common directors) mainly in respect of purchases and sales of goods.  Such transactions, which have been concluded on the terms and basis determined by the Company and those companies and in the ordinary course of business, are summarized below :-



(Unit : Million Baht)

Consolidated
The Company Only


For the three-month 
For the three-month 


periods ended 31 March
periods ended 31 March
Pricing policy

2003
2002
2003
2002

Transactions with subsidiaries





(eliminated from the consolidated financial statements)





Sales of goods
-
-
45.1
62.8
Agreed price
Cost of sales
-
-
40.9
44.4
Agreed price
Other expenses
-
-
1.5
2.1
Based on agreement






Transactions with related companies





Purchase of goods
0.4
-
0.4
-
Agreed price
Other expenses
1.3
1.1
1.3
1.1
Based on agreement

		(UNAUDITED BUT REVIEWED)
	The outstanding balances of the above transactions have been separately shown in the balances sheets with the details as at 31 March 2003 and 31 December 2002 as follows :-


(Unit : Thousand Baht)

Consolidated
The Company Only

31 March
31 December
31 March
31 December

2003
2002
2003
2002
Trade accounts receivable - related parties




Subsidiary company




The Direct Trading Corporation Ltd.
-
-
75,090
87,356
Total trade accounts receivable




   - subsidiary company
-
-
75,090
87,356
Related companies




Recolte (S) Pte. Ltd.
410
410
410
410
Recolte MED (M) Sdn. Bhd.
37
37
37
37
Pentonic Enterprise Co., Ltd.
3,914
3,914
-
-
Treasure Win Trading Ltd.
1,441
1,441
-
-
Alcoures Co., Ltd.
1,844
1,844
-
-
Classmate Enterprise Co., Ltd.
5,208
5,208
5,208
5,208
Total trade accounts receivable - related companies
12,854
12,854
5,655
5,655
Total trade accounts receivable - related parties
12,854
12,854
80,745
93,011





Other receivable - related parties




Thai Metal Pen & Gift Industries Co., Ltd.




Recolte (S) Pte. Ltd.
30
30
30
30
Recolte MED(M) Sdn. Bhd.
2
2
-
-
Alcoures Co., Ltd.
1
1
-
-
Inter-Asian Broker Co., Ltd.
4
4
-
-
Total other receivable - related parties
15
15
-
-

52
52
30
30

		(UNAUDITED BUT REVIEWED)



(Unit : Thousand Baht)

Consolidated
The Company Only

31 March
31 December
31 March
31 December

2003
2002
2003
2002
Other payable - related parties




Subsidiary companies




Summer Sun Co., Ltd.
-
-
3,633
3,636
The Direct Trading Corporation Ltd.
-
-
361
911
Total other payable - subsidiary companies
-
-
3,994
4,547
Related companies




Treasure Win Trading Ltd.
2,635
2,635
-
-
Pentonic Enterprise Co., Ltd.
709
709
-
-
Total other payable - related companies
3,344
3,344
-
-
Total other payable - related parties
3,344
3,344
3,994
4,547
In 2002 a subsidiary received the return of goods and equipment from a foreign related company of approximately Baht 3 million for repayment of debt.  Those goods comprised inventory of the subsidiary and other goods which did not belong to the subsidiary.
4.	PROPERTY, PLANT AND EQUIPMENT
	The Company and its subsidiaries has mortgaged its land and building thereon and machinery with financial institutions to secure against credit facilities and loans obtained from those financial institutions.

		(UNAUDITED BUT REVIEWED)
5.	INVESTMENTS IN SUBSIDIARIES ACCOUNTED FOR UNDER EQUITY METHOD
(Unit : Thousand Baht)



Percentage
Investment
Company's name
Type of business
Paid up capital
of investment
At cost
Equity


Million Baht

31 March
31 December
31 March
31 December




2003
2002
2003
2002
The Direct Trading Corporation
Sales of pen and stationery






   Limited
products
15
99.00
-
14,850
-
2,000
Summer Sun Company Limited
Manufacturing and 







Sales of pen and stationery






Total investment in subsidiary (in the
products
12
99.00
11,880
11,880
4,380
4,356
   Company's financial statements)



11,880
26,730
4,380
6,356
During the current period, there were no dividend payments from the agree mentioned subsidiary companies.
In addition, as at 31 March 2003, investments in an subsidiary company with deficit in shareholders' equity are presented as a separate item in the Company's financial statements are as follows :-
The Company Only
(Unit : Thousand Baht)


Paid-up
Equity
Investment
	
Type of business
Share capital
interest
Cost method
Equity method


Million Baht
%


31 March 2003





Excess loss over cost of investment in subsidiary company





The Direct Trading Corporation
Sales of pen and stationery




   Limited
products
15
99.00
14,850
(5,776)
Total investment in subsidiary which has excess of loss over cost of investment in the Company's financial statements



14,850
(5,776)
During the current period, there were no dividend payments from the aforementioned subsidiary companies.

		(UNAUDITED BUT REVIEWED)
6.	INVESTMENTS IN RELATED AND OTHER COMPANIES
(Unit : Thousand Baht)




Cost method
Dividend


Paid-up
Percentage of 
31 March
31 December

Company's name
Type of business
capital
investment
2003
2002

Thai Metal Pen & Gift
Sales of pen and stationery





   Industries Co., Ltd.
products
500
19.00
95
95
-
Thumniti Public Co., Ltd.
Tax consultant
5,000
0.09
51
51
-
Total



146
146

7.	BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS


(Unit : Thousand Baht)

Consolidated
The Company Only

As at
As at
As at
As at

31 March
31 December
31 March
31 December

2003
2002
2003
2002
Bank overdrafts
78,705
66,551
62,896
53,033
Short-term loans
110,000
100,000
110,000
100,000
Trust receipts
38,655
43,918
38,655
43,918
Total
227,360
210,469
211,551
196,951
	Bank overdrafts and short-term loans from financial institutions of the Company are guaranteed by its subsidiary and related companies and secured by a mortgage of land, building and machinery.

		(UNAUDITED BUT REVIEWED)
8.	OTHER PAYABLE - RELATED PARTIES
	As at 31 December 2000, a subsidiary has requested for compensation claim from the Company for damaged inventories amounting to Baht 4.07 million.  The subsidiary recorded as inventory balance and allowance for liability from receipt of such inventory of Baht 4.07 million.  The subsidiary has performed the physical count of inventory of which the quantities counted were less than the qualities in the documents. Those discrepancies could not be concluded.  During 2001, the subsidiary has claimed for compensation from the Company of such inventory as received from customers in 2000 and of some damaged inventory received from customers during 2001 amounting to Baht 1.01 million.  The subsidiary has respectively issued credit notes of Baht 1.92 million to customers for those damaged inventory.  The value which the subsidiary discount to customers was less than that as per the documents by Baht 3.3 million (after the adjustment of exchange rates as at period end).  The subsidiary has recorded such discrepancies as other payable - related parties.
9.	LONG-TERM LOANS


(Unit : Thousand Baht)

Consolidated
The Company Only

As at
As at
As at
As at

31 March
31 December
31 March
31 December

2003
2002
2003
2002
Loans in Baht currency
1,665
1,901
1,665
1,901
Less : Current portion of 




               Long-term loan
(1,495)
(1,467)
(1,495)
(1,467)
Long-term loans - net of




   current portion
170
434
170
434

		(UNAUDITED BUT REVIEWED)
The Company's land, buildings, machinery and equipment together with future additions were pledged as collateral.  In addition, a subsidiary company pledged its land and buildings as joint collateral.
Under the terms of the above agreements, the Company and its subsidiaries must comply with certain conditions and restrictions stipulated in the agreements.
10.	CORPORATE INCOME TAX
	Corporate income tax for the period has been calculated after adding back provision for expenses which are disallowed for tax computation purpose.
11.	FINANCIAL INFORMATION BY SEGMENT
	The Company's and its subsidiaries' operations involve a single industry segment in manufacturing and sales for both domestic and export markets of pens and related products and are carried on in the single geographic area in Thailand.  As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.
	For the three-month periods ended 31 March 2003 and 2002, the export represented approximately 17 percent and 12 percent of total sales, respectively.
12.	COMMITMENTS AND CONTINGENT LIABILITIES
	12.1	As at 31 March 2003 and 31 December 2002, the Company and its subsidiaries had outstanding bank guarantees of approximately Baht 3.6 million and Baht 3.6 million, respectively (the Company only : Baht 3.2 million and Baht 3.2 million, respectively) issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business of the Company and its subsidiaries.

		(UNAUDITED BUT REVIEWED)
	12.2	In 2002, a subsidiary was sued by an ex-employee in connection with its refusal to pay sales commission amounting to approximately Baht 0.4 million, and in August 2002, the Labor Court ordered the Company to pay such commission.  The subsidiary appealed the case to the Supreme Court, placing a bond of Baht 0.45 million.  As at 31 March 2003, the case is currently being heard by with the Supreme Court.  The subsidiary has set aside an allowance for part of liability in its accounts.
		However, in April 2003, the supreme court render the judgment in favor of an ex-employee and the subsidiary has to pay the commission of Baht 0.45 million.  The actual amount paid was not significant different from the liability recorded.
	12.3	As at 31 March 2003 and 31 December 2002, the Company has commitments in respect of lease agreements for land, building, machines and vehicle amounted to approximately Baht 8.2 million and Baht 11.0 million, respectively.
13.	FOREIGN CURRENCY RISK
	Below is the summary of Company and its subsidiaries's significant foreign currency-dominated assets/liabilities as at 31 March 2003, which were unhedged.
Currency
Assets
Liabilities
USD
304,989
639,924
SGD
41,897
-
Yen
-
1,515,000
HKD
271,424
-
CHF
-
325,919
EURO
-
445,512
DM
-
7,758
14.	APPROVAL OF INTERIM FINANCIAL STATEMENTS
	These interim financial statements have been approved by the directors of the Company.

-  11  -


